The effect of product market competition on capital structure: empirical evidence from the newspaper industry

This paper analyzes whether the extent of product market competition that a firm faces affects its capital structure. We study the effect of competition on leverage for firms acting in the US newspaper industry. Potential endogeneity between market structure and capital structure is addressed by exp...

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Autor principal: Schargrodsky, Ernesto Santiago
Formato: Documento de trabajo acceptedVersion
Publicado: Universidad Torcuato Di Tella. Escuela de Negocios. Centro de Investigaciones en Finanzas (CIF) 2017
Materias:
Tipo de cambio
Acceso en línea:http://repositorio.utdt.edu/handle/utdt/6279
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Repositorio Digital Universidad Torcuato Di Tella de Universidad Torcuato Di Tella
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institution Universidad Torcuato Di Tella
institution_str I-57
repository_str R-163
collection Repositorio Digital Universidad Torcuato Di Tella
topic Tipo de cambio
spellingShingle Tipo de cambio
Schargrodsky, Ernesto Santiago
The effect of product market competition on capital structure: empirical evidence from the newspaper industry
description This paper analyzes whether the extent of product market competition that a firm faces affects its capital structure. We study the effect of competition on leverage for firms acting in the US newspaper industry. Potential endogeneity between market structure and capital structure is addressed by exploiting the exogenous development of other mass media to instrument for the decline in the number of cities with competing newspapers. The results suggest that oligopolies have higher debt ratios than monopolies, controlling for other determinants of leverage. We also study the effect of capital structure on prices. For oligopolies, debt ratios show a significant and positive effect on advertising rates. The effect is not significant for monopolies.
format Documento de trabajo
acceptedVersion
author Schargrodsky, Ernesto Santiago
author_facet Schargrodsky, Ernesto Santiago
author_sort Schargrodsky, Ernesto Santiago
title The effect of product market competition on capital structure: empirical evidence from the newspaper industry
title_short The effect of product market competition on capital structure: empirical evidence from the newspaper industry
title_full The effect of product market competition on capital structure: empirical evidence from the newspaper industry
title_fullStr The effect of product market competition on capital structure: empirical evidence from the newspaper industry
title_full_unstemmed The effect of product market competition on capital structure: empirical evidence from the newspaper industry
title_sort effect of product market competition on capital structure: empirical evidence from the newspaper industry
publisher Universidad Torcuato Di Tella. Escuela de Negocios. Centro de Investigaciones en Finanzas (CIF)
publishDate 2017
url http://repositorio.utdt.edu/handle/utdt/6279
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bdutipo_str Repositorios
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